Jed McCaleb Believes Cryptocurrency Will Change the World of Traditional Finance

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Jed McCaleb, the co-founder of Stellar and eDonkey2000, as well as the founder of the Mt. Gox bitcoin exchange, has high hopes for the future of cryptocurrency. McCaleb introduced into the business a decentralized payment process to exchange cryptocurrency that was separate and distinct from bitcoin mining. Currently, McCaleb serves as CTO of Stellar, where he’s taking his ambitions to a higher level. In a recent interview with CNBC, Jed McCaleb spoke of the potential of blockchain to universalize payment systems, while allowing users to still trade in types of traditional currencies they’re comfortable with, such as American dollars or Euros.

 

One of Stellar’s concerns is translating the value of popular cryptocurrencies like Bitcoin and Litecoin to traditional financial exchange forums, such as the stock market. However, in order to get there, companies like McCaleb’s company Stellar will need to bridge the considerable gap between hard currency and cryptocurrency. McCaleb believes this isn’t just possible, but highly probable within the next ten years. Part of the reason for McCaleb founding Stellar had to do with his interest in helping people find solutions for peer-to-peer cryptocurrency exchange on a large scale, rather than simply servicing banks and larger lending institutions.

 

As a company invested in the future of finance, Stellar is already on the right track, with IBM serving as one its most prestigious clients. Jed McCaleb’s company Stellar, backed up Apple and Facebook payment facilitator Stripe, soon became one of the leading cryptocurrencies for 2018 consumers. Lumens, the cryptocurrency tokens Stellar uses in-house, became one of the most sought-after types of digital currency at the beginning of the year, along with Ethereum and Litecoin. By creating virtually no gap between the time money is transferred and received, Stellar is allowing financial institutions to exchange larger quantities of money without the traditional wait time of a wire or even a standard digital transfer. Stellar XLM coins even beat out Bitcoins for transfer speed. Even though traditional investors are still largely wary of cryptocurrency investing, with its high potential of fraud and crashing, the fact that over 9 billion dollars have been created through digital currency in a four year period means that cryptocurrency’s potential can no longer be ignored by large-scale lending institutions and stock market traders.

 

During the cryptocurrency boom of 2017, the value of a single bitcoin rose by 800%. Companies like McCaleb’s Ripple shot up in value as well. Cryptocurrencies in general saw a rise of 1300%, as opposed to the 17% rise in the traditional stock market. This shift led investors to start aggressively mining for bitcoin, while other companies began to understand the value of creating in-house systems of decentralized payment using cryptocurrency.

 

Jed McCaleb’s prediction for the future doesn’t just involve a greater inclusion of cryptocurrencies in traditional finance. He also believes that person-to-person spending and trading will reach a point of such high saturation that a decentralized exchange forum won’t just be logical: It will be the only way to handle the demand. Since Stellar is able to support the exchange of other cryptocurrencies besides Lumens, it’s on its way to providing individual users with a simpler way to exchange digital currency in the traditional marketplace. A newer company called Fairx has started using Stellar’s anchor model to allow for the easy exchange of cryptocurrencies for U.S. dollars. The Stellar model is a fully democratic way to share and exchange a huge variety of funds by creating tokens and issuing credits for exchange without institutions or individuals being able to change or erase data pertaining to a specific transaction. Stellar’s tokens could allow distributors and sellers a way to access different cryptocurrency markets as well as enabling them to invest their tokens safely on the same platform. This could be a conversion point for investors who are wary of fraudulent cryptocurrencies transactions or fundraising schemes. Stellar’s appeal also hinges on the fact that every transaction, at a price of $0.000000027 each, is as competitively-priced as they come. The idea of allowing individuals access to a huge, public listing of exchanges and financial trades isn’t just a move for transparency. It could help keep larger institutions more accountable for their large-scale transactions.

 

Jed McCaleb already has experience with peer-to-peer file sharing and exchange. His company eDonkey2000 was an early version of sites like LimeWire and Napster, which allowed the easy exchange of music files from user to user. eDonkey2000 was the first of these networks to use multisource downloading, which made it possible for larger files to be broken up and distributed as smaller bits for optimum sharing. McCaleb’s interest in making file sharing simple and democratic has informed his work since his time at Mt Gox, which he sold to another developer in 2011, and now at Stellar, where he has new plans for creating a larger, simpler cryptocurrency trading network.

 

But Stellar’s main potential, according to McCaleb, lies in its ability to tap markets that are currently underserved by traditional banks. This includes potential investors who are wary of the stock market’s fluctuating highs and lows, as well as the estimated 2 billion “unbanked” people across the world who don’t have or want to be served by a traditional financial institution. This includes people who are unable to open a bank account as well as people who are wary of more concrete moneylending forums. McCaleb sees this population as a huge untapped market that can be ideally served by what Stellar has to offer.

Stay connected with Jed McCaleb on LinkedIn here

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